Master Franchising can be one of the most lucrative investments in franchising.
AT Franchise Consultants specializes in helping business investors research,
finance and buy an Area Development or Master Franchise. We can guide you through
the franchise acquisition process by utilizing our business experience, skills,
resources and contacts. We have Area Development and Master Franchise opportunities
available in numerous business categories.
What is the Concept of Master Franchising?
Master Franchising (also known as Sub-Franchising) offer the opportunity for
an individual (Master Franchisee) or corporate entity to purchase the rights
to sub-franchise a franchisor's business concept within a specific territory,
region, state, or country. These rights are secured by a franchise or licensing
fee charged by the Franchisor. This fee may vary in size depending on a number
of factors such as the size of the territory purchased.
Master Franchising allows the Master Franchisee the rights to offer and sell
individual franchises along with the rights to collect a pre-determined percentage
of the franchise fees and royalties generated by each unit sold in a designated
territory. The size and percentage of these fees will vary depending on the
particular agreement.
Depending upon the agreement, the master franchisee may also be required to
open a certain number of units in a specific time frame or schedule, and may
also be required to open and operate one or several units of their own. In general,
Master Franchisees will also be responsible for providing a certain level of
ongoing support (training & recruiting) services to the franchisees within
the designated territory.
Master Franchises generate revenue & income through:
Operating Units - The Master Franchise owner will setup and operate
at least one unit that is also used as a training center. Although this owner
is not likely to be a hands on owner, the operating units can be more profitable
due to the greatly reduced franchise fee and royalty.
Franchise Fees - When you sell a franchise, you receive a franchise
fee. Most franchise fees are between $20,000 - $40,000 and in a typical master
franchise program you keep most of the franchise fee!
Ongoing Royalties - This is the ultimate income source. Once you help
set up the franchises, you receive royalty income or annuity type income for
the rest of the life of those franchises. Imagine receiving 2% to 5% of your
franchisee's volume every month.
Products or Additional Services - There may be additional income available
from the distribution of products or services to the franchisees in your territory.
Turnkey Unit Development - There may be opportunities to sell single
or multiple franchise units and make a profit on the sale.
Real Estate - If real estate is involved with the franchisee's location,
often the master franchisee can become involved in the development of sites
and receive other types of real estate related income.
The key characteristics of a typical Master Franchise are:
Lucrative Business - Extremely profitable due to diversified revenue
streams.
Very Few Customers - Your customers are your franchisees. You help
support a small number of franchisees who typically own several franchise units
each.
Very Few Employees - Typically you will operate a master franchise
by yourself and then expand to add more staff.
Very Little Office Space - Start with a home office before expanding
to an outside office.
Build Equity Faster - Once you sell a few franchises or open your own
stores, you increase the value of your business significantly. Not only do you
have an existing business with cash flow, you have additional franchise opportunities
to sell which gives the master franchise a higher value.
Low Overhead - You don't have to jump into the business with a large
office, staff and other overhead expenses. You can expand as you grow.
Building Business Value - As you open your own outlets you create another
asset of value. You now have your master franchise with a specific value and
also your own franchise with its value. As the value of your franchise increases,
it increases the value of your master franchise. They are separate assets that
you may sell whenever you like.
You Own an Exclusive Territory - Only you and your designated franchisees
will be allowed to develop franchises in your area. Your exclusive territory
could be a county, city, large metropolitan area, state, several states, or
country.
More Freedom & Flexibility - Unlike a normal franchise, a master
franchise helps set the standards of the franchise in your area.
Latest Technology & Business Ideas - Being part of a larger franchise
system allows the best ideas to flow into the corporate office and then into
the field. You'll have your own research and development department built right
in.
No Industry Experience Needed - You will receive industry specific
training and support from the corporate office in the beginning and continued
ongoing support.
Best of all it is a Franchise! - Franchises as a whole enjoy a 92%
success rate and Master Franchises experience even greater success rates.
